Why Is Trader Joe's Beer So Cheap?

Selling quality products for unbeatable prices is Trader Joe's M.O., and the stores' beer section is no exception. Many of the brands the local grocer sells go for just over a dollar per, and dedicated beer-loving customers never forget to pick up a six-pack whenever they stop in for a grocery run. Those unfamiliar with the neighborhood retailer, however, may pause given how low the prices are, thinking there's no chance the merchandise could be of good quality for the modest cost.

But the prices have nothing to do with the quality of these brews. Part of the cut rate is due to the fact that the grocer works closely with certain makers and distributors to produce private label brands, like the Trader José and the Josephsbrau varieties. Such ongoing relationships give TJ's the chance to trade cost for volume, and those savings are passed onto the customer. 

Trader Joe's seems also to use alcohol — of more common brands as well as its own — as loss leaders, or products meant to attract foot traffic within the store in the hopes that customers will pick up other items. This is done with more seasonal and promotional items as well, but booze is a year-round shelf-stocker.

It's common for grocers to offer surprisingly low prices on products like milk, eggs, and bread with the thought that when customers pick up these weekly staples, they'll grab other items for which the store's margins are higher. This is also why milk is often kept at the back of the grocery store. While many things bring customers through Trader Joe's sliding doors, its great selection and prices on beer is a draw. And if customers see their favorite brand for a lower price than they can get anywhere else, they're more likely to make that store their go-to destination when buying beer. 

It helps that major grocery retailers like Trader Joe's are able to order and store more merchandise than their mom-and-pop counterparts. When the distributor can sell its product at a higher volume, it will often negotiate a discount on the purchase. Couple that with the loss-leader strategy, and you have a formula for customers enjoying remarkably affordable brew. But those aren't the only ways TJ's keeps its prices low on cold ones; it also stocks private-label beers that cost less than they would if marketed by the breweries that produce them.

Various manufacturers, such as Naked Juice, supply Trader Joe's with goods, even though they might be rebranded for in-house use. Beer at this neighborhood grocer is no different. Because these distributors don't have to bother with marketing and promoting these brands, they offer them to the retailer for a lower price. Most of the brews patrons rave about from TJ's fit into this category, like its Boatswain line produced by Rhinelander Brewing Company in Monroe, Wisconsin, and the Mission St. series provided by Steinhaus Brewing Company in Monrovia, California. Every private-label beer from Trader Joe's has a unique appeal, and because the breweries aren't marketing for themselves, you don't have to pay an arm and a leg to try them out.

The retailer also chooses how these products are packaged, and not all packaging is equal when it pertains to cost. Many of TJ's brand beers — like the Simpler Times series developed by Gordon Biersch Brewing Company out of San Jose, California, and the Josephsbrau Summer Brew from the same brewery — are available primarily in cans. Aluminum cans weigh less than glass bottles, which lowers shipping costs and the overall price the customer pays when they checkout. Beer also lasts longer when it's packaged in cans. Without sacrificing quality, the neighborhood market finds multiple ways to reduce costs so dedicated fans get the best price on its one-of-a-kind brews.

As we alluded to, Trader Joe's doesn't just focus on in-house brands. It prides itself on its local market theme, and showcases products from regional craft breweries. It's not uncommon to see the adult beverage section of the store displaying varieties only available in your local community. As Catherine Rhodes, then product developer for Trader Joe's put it, "We're not going to have every beer available to you, but our buyers work really hard to have a local selection that's interesting. I actually think that the beer section in a given store is probably the most locally tailored part of the store."

Aside from local craft options, TJ's also carries nationally distributed crowd-pleasers like Modelo, Blue Moon, Guinness, Spaten, and Stella Artois. The mixture of private-label, craft brews, and large corporate brands creates a shopping experience you will have a hard time matching anywhere besides a grand beer emporium. It may not have every type of brew under the sun, but you shouldn't have trouble finding a cold one for any occasion in Trader Joe's beverage section.